Founded in late 2003, the company commenced marketing its current products in 2007 following roughly three years of technology and product development. All Ceelox’ solutions help businesses meet various regulations, namely Sarbanes-Oxley (SOX), HIPAA/ePHI, GLBA, FTC, and FFIEC in addition to multiple state regulations.

Ceelox was formed for the purpose of developing and marketing advanced fingerprint biometric technology and encryption software solutions. Their biometric identification and encryption software solutions provide innovative and new ways for customers to securely access, store, send and receive confidential information. Biometric technology is the science of analyzing specific human characteristics which are unique to each individual in order to identify a specific person from a broader population. The use of biometrics enables enterprise and consumer users to login to different systems and applications using secure credentials based on their unique characteristics, while blocking unauthorized users.

Ceelox commenced marketing its products in the first half of 2007 following more than three years of technology and product development. The company believes that their products meet the needs of companies that require strong data, systems and applications security including financial institutions, healthcare providers, insurance companies, government agencies, utilities and any business where security and identification are key concerns. The need for low cost, efficient access security is a competitive necessity for all businesses.

Not only is Ceelox security economical, but with Ceelox ID™, businesses can eliminate passwords altogether and with them, eliminate all or nearly all associated costs of password administration and helpdesk support costs too. According to a Gartner Group and IDC estimate, 20% to 50% of the helpdesk calls are related to username and password, and the average cost of a helpdesk call is $38. Per their research, the cost of password administration and management can total $200 to $300 per user per year, not including the cost of any breaches. Ceelox believes the percentage of helpdesk calls for password reset is rising as businesses attempt to make passwords stronger and require more frequent password changes.

Ceelox Solutions Target 30% Reduction in Cybercrime.

Ceelox, Inc. targets elimination of common cybercrime events which occurred in 2009 as announced in FBI report. Ceelox’ two factor identity authentication utilizing biometrics can provide the greatest deterrent to identity and credit card thefts. Ceelox is a majority-owned operating subsidiary of Nicaragua Rising Inc. (OTCBB: NCRG) (the “Company” or “Nicaragua”).

The U.S. Federal Bureau of Investigation’s Internet Crime Complaint Center (IC3) has reported that complaints of cyber crime losses in the U.S. more than doubled from $265 million in 2008 to $560 million in 2009.

The increase was much higher than previous year-over-year figures. The Center’s web site carried the following annual numbers:

YEAR	COMPLAINTS RECEIVED	DOLLARS LOSS
2009	336,655	$559.7 million
2008	275,284	$265.0 million
2007	206,884	$239.1 million
2006	207,492	$198.4 million
2005	231,493	$183.1 million

The IC3 annual report said that the group received 336,655 complaints in 2009, an increase of 22.3 % over 2008. Of those complaints referred to local, state and federal agencies over 30% involved identity theft, credit card fraud and computer fraud and hacking.

“This significant increase in crime is proof of the length that criminals will go to during these tough times. With the implementation of Ceelox ID, our real-time, live biometric access authentication software, nearly 30% of the reports could be eliminated.” said Gerry Euston, Ceelox Chief Executive Officer.

Ceelox ID Client™ and Ceelox ID Online™ are software packages offered by Ceelox that easily and quickly integrate into personal computers as well as enterprise and financial institution’s systems. Ceelox ID Client offers biometric security for personal desktop and laptops. Ceelox ID Online™ provides an additional layer of security that overlays an enterprise or financial institution’s existing security. With two-factor authentication, anyone significantly enhances the security of their personal identification and authentication.

Online transactions such as banking, wire transfer and ACH applications can be better protected through two factor authentication i.e. something you know, username, and something you are, your fingerprint biometric. Unlike other 2-factor authentication solutions, Ceelox ID®, biometric two-factor authentication, is integrated into the design, creating the most definitive real time authentication tool available. In addition, the Ceelox patent pending solution eliminates replay attacks, which have been the source of the recent wave of cybercrime creating a preventative medicine approach to security.

Password Weaknesses Addressed by Ceelox ID™ Historically, businesses have relied heavily on passwords to control access to internal and customer-facing applications. It is now commonly accepted that passwords alone are no longer a safe method of access control because of the numerous weaknesses associated with their use. The FDIC and FTC regulations now require financial institutions, as well as any business that collects, uses, and stores individuals’ personal information, to identify and address reasonably foreseeable internal and external threats that could result in unauthorized disclosure of customer information. The following known password weaknesses identified by the Federal Financial Institution Examination Council (FFIEC), must be addressed, if institutions are to remain within the law. Passwords are the most common authentication mechanism and the weakest. Since ‘strong’ passwords are difficult to remember, users often weaken password security by writing them down and hiding them in obvious places. Passwords are also subject to many types of attacks including:

• Keylogger attacks through which a monitoring device is placed on the user computer to capture passwords for the attacker;
• Dictionary and brute force attacks through which the attacker obtains the system password file and compares the hashed password against hashes of commonly used passwords;
• Password guessing attacks used with some knowledge about the account holder and the bank’s password policies;
• Social engineering attacks used to trick the user into giving up their password;
• Phishing and man-in-the-middle attacks lure users to fake bank sites for the purpose of identity theft;
• Relay attacks through which an attacker eavesdrops on communications between customer and the financial institution to obtain username and password information.
• Pass phrases are subject to nearly all the same password weaknesses above although may require additional time or attempts on the part of the hacker.
• Internet banking authentication presents unique challenges, because banks do not benefit from physical security and controlled computing and communications; the bank cannot control the user; and passwords are more likely to be static and significantly more vulnerable.
• Warehouse attacks result in the compromise of a storage system using one or more attack methods described above. Warehouse attacks typically compromise an entire authentication system or worse, an entire customer database as was the case with the TJX data breach that exposed over 96M customer records.

Token systems have these inherent weaknesses, also identified by the FFIEC:

• Tokens can be lost or stolen during delivery or while in the possession of the end user;
• Ease in guessing any password-generating algorithm within the token;
• Ease in forging authentication credentials that unlock the token;
• Tokens have been reverse engineered and cloned;
• Tokens are subject to man-in-the-middle and phishing attacks;
• And like passwords, tokens can be shared. Seventeen percent (17%) of token users reported sharing their tokens within the last 12 months.

Every one of the above threats, hazards and weaknesses are either completely eliminated or greatly reduced with Ceelox ID™ biometric authentication and access control. Keyloggers cannot capture a biotemplate rendering dictionary and brute force attacks useless. Internet banking is more secure, because a password, compromised by phishing or social engineering, is useless without a biotemplate captured during a live scan. Ceelox ID™ also has none of the above token weaknesses. And current state-of-the-art fingerprint biometric technology used by Ceelox, makes forging biotemplate authentication impossible, because a live scan is required.

CEELOX’ PRODUCT PORTFOLIO

Ceelox has a product portfolio that caters to a wide range of customers. The company offers solutions that scale from one user to thousands. Single users can migrate to enterprise solutions with relative ease based on the availability of hardware to capture biometric data. The company has various patents filed on its biometric identity-based access authentication. Likewise, patents have been filed to utilize biometrics to secure information over the network, generate discardable keys for encryption and authentication, thus, negating the need for key management systems.

Ceelox, with technical support from Microsoft, is also migrating its identity-based authentication and encryption products to fully interoperate with the WBF, not just at the Windows client level, but also at the server level to support LAN and Internet authentication. Product release is planned for next quarter. The Company’s products will then take full advantage of all the Microsoft WBF support for biometrics outlined on page 3 and leverage the common biometric platform at the desktop, within the enterprise LAN, and the Internet. The company’s patent pending Parallel Key Infrastructure (PLKI) protects the credential payload (the corresponding user biometrics and authentication credentials) while traversing a network or the Internet. This unique functionality ensures that the Ceelox system will never accept a replay attack and provides a competitive advantage over other biometric solutions. In the final analysis, Ceelox’ PLKI renders sophisticated fraudster methods such as phishing, man-in-the-middle, and packet sniffing ineffective. Chart 1.3 provides an overview of Ceelox’ parallel key infrastructure and its approach to security credentials.

CEELOX’ PRODUCT LINE: CEELOX ID® Ceelox ID® software authenticates users through biometrics before allowing them access to personal computers, files, external drives, and networks. Ceelox ID® enrolls a new user’s fingerprint by conducting several scans of each of two or more fingers. When it obtains sufficient data on each enrolled finger, it builds a biometric template. Ceelox ID® notifies the user that enrollment was successful. At each subsequent user logon, Ceelox ID® prompts the user to authenticate by placing an enrolled finger on the fingerprint scanner. The software then compares data obtained from the live fingerprint scan to the user’s enrolled biotemplate. If the two sets of data match, Ceelox ID® grants access. Ceelox ID® is a highly scalable product that is available in three configurations, namely:

• Ceelox ID® Client (PC) Edition – individual computer authentication application
• Ceelox ID® Server Edition – enterprise authentication application
• Ceelox ID® Online – secure web site or enterprise authentication application *

* Ceelox will also host Ceelox ID Online Internet and remote access authentication as a service.

Ceelox Product Alert: Security is just a touch away with Ceelox ID® Stand Alone! Ceelox, a biometric software security company offering identity authentication, and, data and email encryption, recommends Ceelox ID™ Stand Alone to provide the most personal and convenient form of user authentication. With just a swipe of a finger, Ceelox ID enables a single finger scan to protect access to your personal computer. Likewise, Ceelox ID biometrically protects access to all password-protected Web sites, applications, e-mail and personal documents.

Why Ceelox ID™ Ceelox ID™ fingerprint authentication dramatically reduces the chance that an unauthorized person could gain access to your personal computer. User names and passwords can be lost, stolen, forgotten or shared. Ceelox ID™ offers strong authentication and convenient password replacement with the swipe of a finger. Various users can also use Ceelox ID™ as the login to a single home or personal computer further protecting individual data.

Reduce Your Password Related Overhead With a profound reduction in password related overhead, Ceelox ID™ is the most cost effective way to man­age secure user authentication available today. Users can reduce the frustration or having to remember user name and password to multiple websites and applications. Ceelox ID™ offers the ability to push your user name and password credentials to the websites and applications you use every day. Simply save your passwords within Ceelox ID™ login and gain access with your fingerprint. With Ceelox ID™, you can quickly reduce anxiety; improve productivity, all while improving your security.

Ceelox ID™ is Easy to Use and Deploy Ceelox™ focuses on building powerful, easy to use applications that provide the best customer experience. Security solutions should never make the user feel incapable of us­ing them. This is at the core of Ceelox™ solutions. With that in mind, Ceelox solutions offer an intuitive user interface with solution-based flexibility that cannot be rivaled. Ceelox ID™ quickly and easily adds a strong layer of biometric authentication without having to remove or change your existing security infrastructure. Ceelox ID™ is compatible with all popular laptop computers with an embedded fingerprint sensor. We can provide a scanner if your computer does not have one. Ceelox ID™ is the best biometric software technology.

Ceelox ID™ is the Preferred Method of Authentication Recent studies and countless reports reveal the need for stronger security measures. Consumers and busi­nesses of all sizes are replacing less secure, less convenient methods of authentication with biometrics. There was a time when biometrics was too difficult to deploy and too expensive to consider. Those times are gone. In a worldwide survey to study computer security preferences, Unisys found that 66% of users favor biometrics as the method to combat identity theft. A key benefit of Ceelox ID™ is the convenience of not having to remember a long list of passwords and login information. When you increase the speed of identity authentication and combine it with stronger security and convenience, you will quickly see why Ceelox ID™ is the preferred method of authentication today.

System Requirements: Windows XP® or Windows Vista® Compatible fingerprint scanner See the Ceelox Website for more detail, www.ceelox.com

Ceelox Product Alert: Security is just a touch away with Ceelox ID® Server Edition!

Ceelox, a biometric software security company offering identity authentication, and, data and email encryption, recommends Ceelox ID™ Server Edition to replace passwords and other weak authentication methods with the strongest form of Identity Access Management available today. Biometric user identification and access controls permit access only to authorized individuals. Logical access control is provided for sensitive customer information systems and applications, computer devices, networks, files or Web sites. Ceelox ID™ Server Edition solves the enterprise information security requirements for Financial, Health Care, Utility, Government and other industries.

Why Ceelox ID™ Ceelox ID™ fingerprint authentication dramatically reduces the chance that an unauthorized person could: gain access to your personal computer, network, key business applications, and sensitive company or customer data. User names and passwords can be lost, stolen, forgotten or shared. Ceelox ID™ offers strong authentication and convenient password replacement with the swipe of a finger. Whether you are an enterprise administrator or user, Ceelox ID™ provides increased security, productivity and compliance.

Reduce Your Password Related Overhead With a profound reduction in password related overhead, Ceelox ID™ significantly reduces IT costs and is the most effective way to man­age secure user authentication available today. By far the largest category of help desk calls is user name and password related issues. The use of Ceelox ID™ substantially reduces the large number of your help desk calls related to user names and passwords. A lost, stolen or shared password equals lost productivity and potential theft of company or customer information. In addition, for users with multiple application passwords to remember, Ceelox ID™ offers the ability to push your user name and password credentials to the websites and applications you use every day. Simply save your passwords within Ceelox ID™ login and gain access with your fingerprint swipe. With Ceelox ID™, you can quickly improve productivity while improving your security.

Ceelox ID™ is Easy to Use and Deploy Ceelox™ focuses on building powerful, easy to use applications that provide the best customer experience within all levels of your organization. Security solutions should never make the user feel incapable of us­ing them. This is at the core of Ceelox™ solutions. Ceelox ID™ quickly and easily adds a strong layer of biometric authentication without having to remove or change your existing security infrastructure. Ceelox ID™ Server Edition is highly scalable and supports Windows Active Directory. Ceelox ID™, when combined with Windows Active Directory, allows users to access any secured location with a Sin­gle Sign On (SSO). SSO provides convenience to the user, and eliminates the need for multiple passwords which can be forgotten or lost, consuming costly help desk time. Ceelox ID™ is compatible with popular laptop computers with an embedded fingerprint sensor. For computers lacking an imbedded sensor, an external, USB interface scanner can be provided. Ceelox ID™ is the best biometric software technology.

Ceelox ID™ is the Preferred Method of Authentication Recent studies and countless reports reveal the need for stronger security measures. Consumers and busi­nesses of all sizes are replacing less secure, less convenient methods of authentication with biometrics. There was a time when biometrics was too difficult to deploy and too expensive to consider. Those times are gone. In a worldwide survey to study computer security preferences, Unisys found that 66% of users favor biometrics as the method to combat identity theft. A key benefit of Ceelox ID™ is the convenience of not having to remember a long list of passwords and login information. When you increase the speed of identity authentication and combine it with stronger security and convenience, you will quickly see why Ceelox ID™ is the preferred method of authentication today

System Requirements Server Edition: Windows 2000, Windows 2003, Windows XP/ XP Professional, Vista for clients. Windows 2000, Windows 2003, Windows XP Professional for server. Windows based LAN configuration. Compatible fingerprint scanner. Professional services required for configuration and deployment.

Ceelox Product Alert: Security is just a touch away with Ceelox ID® Online! Online Biometric Authentication made Simple. Ceelox, a biometric software security company offering identity authentication, and, data and email encryption, recommends Ceelox ID Online for companies who require that their data be accessible from anywhere, at all times. In order to authenticate a remote user, authentication technologies such as passwords and tokens are widely used. However, how do you verify that the user accessing your mission critical systems is actu­ally that person? Answer: With a “biometric digital signature”, of course. Ceelox ID Online™ creates true, multifactor user authentication access for Internet sites, networks and web-based applications. Ceelox ID Online™ fingerprint biometrics enables you to implement authentication before allowing user access.

Why Ceelox ID Online™ With Ceelox ID Online™, an enterprise can quickly and easily add a strong biometric authentication layer to their existing online security measures. Typical online authentication strategies rely on passwords, which can be shared, lost, phished, or hacked. Enterprises that rely on user names and passwords alone may be providing access to sensitive Internet sites, networks or web based applications to unauthorized individu­als. Ceelox ID Online™ adds a strong factor of authentication, insuring that only authorized individuals can access critical data.

Identity Access Management Ceelox ID Online™ provides enterprises with a strong audit trail of user identity – an accurate record of who accessed Internet sites, networks or web-based applications. Ceelox ID Online™ reduces online fraud and identity theft. The rate of identity theft-related fraud has been sharply rising since 2003. A report from research firm, Gartner, shows that from mid-2005 until mid-2006, about 15 million Americans were victims of fraud that stemmed from identity theft resulting in losses of more than $50 billion to businesses and con­sumers. Any online application accessible via user name and password benefits from the greater security included with the easy-to-integrate, additional security layer provided by Ceelox ID Online™.

Tokens Are Expensive, Easily Lost, Stolen or Shared Are you concerned about strong authentication for your Internet sites, networks or web-based applications? If so, you have no doubt researched hardware tokens. These expensive solutions certainly had their place in authentication history. However, they are quickly becoming well… history. Unfortunately, like passwords, these devices can still be lost, shared, and stolen. These solutions are at best a “band-aid” approach to one of the most critical security concerns today, user authentication. If your applications require true multifac­tor authentication security, using Ceelox ID Online™ fingerprint biometrics in combination with user names and passwords provides the strongest and most cost effective user authentication solution readily avail­able today. The majority of all websites are protected by user names and passwords only. Online banking or investment sites, Internet auction sites, credit related sites, social networking sites and the list goes on. By adding a biometric layer of security using your unique fingerprint, Ceelox ID Online™ ensures that only authorized individuals can gain access to critical websites, networks and web-based applications.

The Preferred Method of Online Authentication Recent studies and countless reports reveal the need for stronger security measures. Consumers and busi­nesses of all sizes are replacing less secure and convenient methods of authentication with biometrics. There was a time when biometrics was too difficult to deploy and too expensive to consider. Those times are gone. In a worldwide survey to study computer security preferences, Unisys found that 66% of users favor biometrics as the method to combat identity theft. A key benefit of Ceelox ID Online™ is the conve­nience of not having to remember a long list of passwords and login information. When you increase the speed of identity authentication and combine it with stronger security and convenience, you will quickly see why Ceelox ID Online™ is the preferred method of authentication today.

System Requirements Server Component: Windows 2000, Windows 2003, Windows XP Professional. Microsoft SQL server. Windows based Web server configuration (IIS .NET 2.0). Fingerprint scanner for particular cases (UPEK, LTT). Professional services required for installation, configura­tion and deployment.

Client Component: Windows 2000, Windows 2003, Windows XP/ XP Professional Vista. Compatible fingerprint scanner.

CEELOX VAULT™ Ceelox Vault™ is a biometrically enabled encryption and decryption application. Ceelox Vault is unique in that it allows a user to quickly and easily encrypt and decrypt sensitive data with a simple drag-and-drop approach, along with the security of a unique fingerprint template as the key. When bound to a portable flash memory device or external hard drive, Ceelox Vault will allow a user to feel comfortable when transporting sensitive files and folders. The key features of Ceelox Vault include:

• Drag-and-drop encryption
• Biometric template as part of the encryption key
• Unique encryption key generation for each file and folder
• Unique encryption key never stored with the encrypted data
• Portable file synchronization
• FIPS 140-2 certified encryption module

 

CEELOX SECUREMAIL SecureMailTM is a simple but powerful e-mail encryption tool that integrates as a plug-in to Microsoft Outlook offering secure communications over internal networks or the Internet. It is an essential tool designed to secure sensitive information in the growing world of e-mail communications. In addition to securing e-mail communications, no additional hardware appliance or email server configuration change is required in this easy-to-use, secure, e-mail encryption tool for use across all markets, especially, small to medium business. The key features of Ceelox SecureMailTM include:

• Microsoft Outlook and Internet Explorer plug-ins for web-based email systems such as hotmail, gmail and yahoo mail.
• FIPS 140-2 certified encryption module (1Q10)
• Biometric encryption access authentication
• Unique encryption key per encryption (works on the Parallel Key Infrastructure, similar to Ceelox ID®)
• Key access restricted to e-mail address distribution
• Encryption of all kinds of media attached within e-mails

Ceelox Management

Gerry Euston – CEO: Gerry Euston joined Ceelox as its Chief Executive Officer in July, 2006. Gerry comes to Ceelox with over 25 years of extensive executive-level telecommunications experience in general management, marketing, product management and development, finance, strategic planning, line management and corporate staff positions. He brings sound business judgment and demonstrated leadership as evident in his successful career at Sprint Communications and his chief executive officer role at start-up Falcon Wireless. At Sprint Mr. Euston ran the Enhance Services Division which he grew from $50M to over $500M in revenue in a three year period. Prior to that he ran Sprint’s national account marketing where he conceived and brought to market the industry’s first virtual private network service offering and helped deliver triple digit growth during his tenure. Later he ran product marketing, management and development for Sprint’s long distance division, and also was responsible for Business Marketing for Sprint’s local service division. Mr. Euston also managed the Federal Systems Division’s finance, information systems, bid and proposal, accounting and administration functions while that division grew from start up to over $300M in revenue. In his role as Vice President Finance Management he was responsible for Sprint’s financial planning, analysis and reporting. During his career at Sprint, Mr. Euston participated in several pivotal strategic planning efforts such as the fiber network business plan, the GTE/Sprint merger business plan and post merger implementation planning.

Mark Grannell – COO: Mark Grannell brings over 20 years of engineering and management experience with Motorola, Sprint, Level 3, and SiriCOMM. His career includes satellite, wireline and wireless telecommunication, data and voice design and engineering; business development; sales and executive-level management. Mr. Grannell’s career has been a steady progression of management responsibilities and successes. His previous duties include:

• As President and CEO, SiriCOMM, Inc., a public company providing data services to the transportation industry, Mr. Grannell aggressively improved product and network performance while reducing cost by over 30%.
• While with Level 3 Communications, Mr. Grannell built and managed the customer relationship with a national carrier/wireless communications company. Sales grew from zero to over $70M with $75M in funnel opportunity.
• While at Sprint Grannell held a variety of management positions. In his last assignment as Vice President, Network, he had overall management responsibility of a broadband network deployment building 18 markets in 12 months, supporting 15,000 customers within a budget of $175M. His duties also included establishing corporate and regional organizations. Across four regions within the US, he built a staff of over 200 people within the first year.

Mr. Grannell earned his Bachelor of Science degree from Kansas State University and his MS Electrical and Computer Engineering from the University of Missouri. He is an elected member of the Gardner/Edgerton Board of Education.

Erix Pizano – Director of Software Development: With over ten years experience leading the successful development and deployment of custom software products, Erix Pizano has taken his wide knowledge of commercial software and applied it to every facet of the Ceelox software development lifecycle. Erix’s prior experience includes successful development and deployment of commercial and custom software products for entertainment, corporate training, education, home automation, and other industries. Before joining Ceelox, Erix was Director of Software Engineering for Intelladon Corporation, Producer/Project Manager for JRL Enterprises, and an e-learning consultant. Erix’s charismatic personality has also allowed him to be a professor for Basic and Advanced Lingo at the International Academy of Design and Technology in Tampa and a 3DS Max Instructor at ITT-Tech in Orlando. Additionally, he has created his own commercial audio control software based on Visual Basic. Trilingual with complete fluency in English, Spanish, and French. Erix has several educational degrees, including:

• A Marketing Management graduate degree from the Autonomous Mexican Institute of Technology
• An Information Technologies and Business Administration masters degree from the Autonomous Mexican Institute of Technology / Harvard University
• An Electronic Systems Engineering bachelor’s degree from the Technological Institute of Monterrey
• An Electronics Technological Bachelor valedictorian degree granted by the French National Ministry of Education.

Michell D’Amico – Director Operations & Finance: With a successful history of leading change and managing turnaround initiatives Michell L. D’Amico, joined the Ceelox management team as Director Operations & Finance. Her extensive experience encompasses both the public and private sectors. While in the Electronic Financial Services department at JP Morgan, Michell was in the key role of Assistant Vice President, Health Savings Account Operations. In this role, she managed account maintenance and financial operations teams with responsibility of staff size of 60. She lead the reengineering of Operations organizations through capacity planning; redefined the Customer Identification Process (CIP) resulting in a 29% increase in open enrollments; and managed the cleanup efforts 15,000 backlogged items. Prior to that, Michell was the Assistant Vice President, Settlement Private Sector where she was responsible for 200 General Ledger accounts. While with the Hillsborough County School District, she was in Purchasing and Internal Auditing roles. Her extensive responsibilities included: Research, preparation, review and award of RFP’s, RFQ’s and bids; negotiation of contracts; development and management of district audits performed by 4 auditors; providing training to administrators, principals, and staff; directed the help desk operations; fraud Investigations and coordination of district-wide accounting software support contract. With a proven track record of success and advancement across multiple business lines, Michell is a great asset to the Ceelox team.

FROST & SULLIVAN’S ASSESSMENT OF CEELOX’ VALUE Ceelox provides unique value through using biometrics to secure access to computing devices, networks, communications, and data. The Company’s solutions have advantages over other authentication form factors currently in use. Advantages often include better economics, stronger access control security, ease of use and ease of management. Enterprises have traditionally weighed the cost of added security, such as smart cards, PKI and OTP tokens, with the need for security. Because of the initial and subsequent high cost of these current solutions, many applications that would benefit from increased security have gone wanting for it.

For example, it is still very typical to find username and password access control to critical core enterprise applications within the enterprise network/LAN. These critical applications would definitely benefit from stronger identity-based access control just as remote access to these systems is often afforded. In the consumer market, businesses have used solutions like username, passwords, and/or SiteKeys to control consumer access to secure websites such as online banking and e-commerce. However, the probability of users being locked out of such systems is high and leaves consumers feeling frustrated and violated by this heavy-handed approach. In addition, current access authentication solutions offer weak security. Other more secure solutions are cost prohibitive and not user friendly enough for mass deployment. The use of biometrics enables enterprise and consumer users to login to different systems using secure credentials based on their unique characteristics, while blocking unauthorized users. In addition to added security, the benefits afforded by Ceelox’ system to end users include low cost, use of the system with multiple applications, and ease of use. Relative to its competitors, Ceelox’ solutions provide unparalleled protection during the transmission of biometric access credentials and strong, advantaged encryption solutions. Ceelox’ approach to biometrics has attracted the attention of Microsoft Corporation, which has also validated biometrics by creating a common platform in the marketplace with their next operating system release, Windows 7 ®. The Windows Biometric Framework (WBF) housed within Windows 7 ® is a common programming interface that enables vendors to develop solutions on common platform. The adoption of WBF is essential to increasing the use of biometrics to secure credentials on a network and the Internet. With an increasing number of laptops and other computing devices shipping with fingerprint readers (in addition to over 85 percent of all laptops and personal computers running on the Windows platform), the opportunity for biometrics vendors with advantaged solutions, such as Ceelox, has increased significantly. As a result, biometrics will soon be a mass market opportunity for identity management. Biometrics is already the most reliable real-time authentication tool available. Moreover, Microsoft’s embracing biometrics within its OS will drive fingerprint reader deployment, lower the cost of biometric authentication, and promises more scalable and interoperable biometrics. Ceelox expects to be the first company to offer true integration of its server and Internet authentication products with WBF. With the introduction of Microsoft Windows 7 and the Windows Biometric Framework, biometrics solutions are poised to grow exponentially. WBF creates a mass-market opportunity, making biometrics solutions available to consumers, in addition to the traditional commercial and government markets. With its strong biometric security, economic pricing model, ease of use, and availability, Ceelox is poised to take advantage of this opportunity to deliver value and achieve exponential growth. Chart 1.5 shows a view of the biometrics adoption timeline reflecting the impact of WBF for consumers and businesses. Chart 1.5: Biometric Adoption Timeline

Ceelox’ solutions have advantages over other forms of authentication and other biometric approaches. Its unique PLKI approach to biometric authentication insures protection of biometric credentials (fingerprint templates) and sensitive information. The Company has also placed a premium on ease of use in the design of its solutions recognizing the mass-market potential. In conclusion, Ceelox’ approach to the use of biometrics (and its product portfolio) provides businesses and IT professionals with a cost-effective alternative to securing their data and intellectual property across the network. In addition, consumers now have access to a solution that is easy to use, cost-effective and provides peace of mind when accessing the internet for day-to-day functions like e-commerce and online banking. In recognition of this opportunity and ability to deliver value consistently to consumers, Frost and Sullivan bestowed its 2009 Emerging Company of the Year award for Biometrics to Ceelox inc.

Client Component: Windows 2000, Windows 2003, Windows XP/ XP Professional Vista. Compatible fingerprint scanner.

Disclaimer: This data sheet is for informational purposes only and is not an offer to sell securities or solicitation of offers to purchase securities and should not be construed to be investment advice. Except for estimates and other opinions attributed to sources identified by name or category, which Core Consulting Group, (“Core Consulting Group”) neither adopt nor endorse. The information contained herein has been supplied to Core Consulting Group from publicly available sources that Core Consulting Group believes to be reliable. Forward looking statements contained herein, which involve risks, uncertainties and other factors that may cause actual results to differ significantly from those anticipated in such statements, including those discussed in the Company’s reports filed with SEC. Core Consulting Group has been retained as a consultant in the investor relations field and for related services from January 8 through June 7^th 2010, and such, Core Consulting Group has been compensated by independent investors, as well as the Company, issuing up to four two hundred fifty thousand rile 144 shares of the Company’s common stock and one hundred thousand dollars.. From time to time, Core Consulting Group and its officers and employees may own or acquire additional securities issued by the Company or may dispose of securities issued by the Company that they hold, which were not paid to Core Consulting Group as compensation. Core Consulting Group acts for its clients and does not provide investment advice. Core Consulting Group is not a registered investment advisor or broker-dealer.